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Zoellick: I’m No Goldbug

By

Matt Phillips

Nov 10, 2010 10:21 am ET

Reuters

World Bank President Robert Zoellick took his lumps this week for seeming to raise the notion of a return to the gold standard. (Except for the fact that he didn’t.) Our colleagues from Korea Real Time point out Zoellick is now saying that his comments which appeared in an FT op-ed, were misunderstood. Here’s Bob Davis:

His proposal has been widely read as a call for a return to a global gold standard, which many economists blame for producing and deepening the Great Depression.

That’s a misunderstanding, said Mr. Zoellick, during a stop in Singapore on Wednesday on his way to the Group-of-20 leaders meeting in Seoul. His intent, he said, was to spark discussion on what he views as an inevitable rethinking of the global monetary system, which he called “Bretton Woods III”—referring to the famous 1944 Bretton Woods, N.H. meeting that laid the groundwork for the post-war international economic system.

Mr. Zoellick said he thinks the coming monetary system will include a number of reserve currencies, including the dollar, euro, yen and, increasingly, the yuan, though he says the dollar is likely to remain “dominant.” He’s deliberately sketchy on the role he envisions for gold, calling it a “reference point” and an “alternative monetary asset,” and not defining those terms in great detail.